Cafeteria Plan Another tax-favored plan option is the Section 125 or “Cafeteria” Plan. These plans allow for conversion of many after-tax expenses (such as group health, life and disability insurance premiums, unreimbursed medical expenses and dependent care) to pre-tax benefits. Savings to the company and to employee participants can be dramatic. The employer saves FICA and Workers' Compensation Insurance premiums. Employees save on federal and state income taxes as well as their share of FICA. Cafeteria Plans & HRA's Cafeteria Plans and HRA's are two very benefit plans allowed by the IRS Tax Code than can help employers to provide benefits to their employee's while saving money on taxes. • Learn about Section 125 cafeteria plans • Learn about Section 105 HRA plans Section 125 Cafeteria Plans A section 125 cafeteria plan from WC Administrators allows you to offer your employees an assortment of benefit options. What is a cafeteria plan? A cafeteria plan is a benefits plan that lets employees choose from a variety of benefit options. Contributions to the plan are made with pre-tax dollars and can cover anything from insurance premiums, to medical expenses or dependent day care reimbursement, to vacation time. • Premium Only Plans POP plans allow employees to pay for insurance with pre-tax dollars. • Flexible Spending Accounts FSA plans allow employees to be reimbursed for qualified non-covered health and dependent day care expenses with tax-free dollars. You design it We help you design a benefits plan that's right for your company. You choose benefits and plan limits. You even tell us how you want the plan to be run. We do the rest A representative will personally handle the management of your cafeteria plan. We assist your employees in the enrollment process. Then, we give prompt, personal, and detailed attention to processing contributions and claims. Plan documents Just need a plan document, not an administrator? We can help with that, too. Section 105 HRA Plans A section 105 HRA plan allows business owners and their employees to save on medical insurance premium costs and other health related expenses. What is an HRA plan? An HRA, or Health Reimbursement Arrangement, is a plan that allows employers to set aside a predetermined amount of money for employees to use to pay for medical expenses. The plan is paid for solely by the employer (meaning employees do not make contributions as in a Section 125 plan). All employer contributions are tax deductible for the employer and tax-free to the employee.
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